House Hunting in ... Turkey

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A one-bedroom duplex apartment in Istanbul is in a building, at center, with foundation walls dating to the 1800’s. It is one of eight units in two adjoining buildings that have undergone a two-and-a-half-year renovation.

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By Alison Gregor

July 2, 2014

A DUPLEX APARTMENT IN A HISTORIC BUILDING IN CENTRAL ISTANBUL

$875,000

This apartment, with stone foundation walls dating to the 1800s and other features of classic Turkish architecture, is in the lively Galata district in central Istanbul. The one-bedroom apartment is one of eight units in a complex called Alaattin Apartments in two adjoining historic buildings that have undergone a two-and-a-half-year renovation.

Several of the apartments are on the market at various prices; the entire building could be bought for $8.2 million, said Cindy Uriona, a broker with the Luxurion Real Estate Group in Istanbul, which has the listing. Historic features of the eight-story building, which has a small glass elevator, include a hand-cut marble staircase and pine doors similar to those found in the nearby medieval landmark, Galata Tower.

The only apartment with a private entrance, this 2,000-square-foot unit is entered through an original steel door, which has been restored and opens to a dining room. Floors on this level are of antique wide-plank wood, and part of the apartment has handcrafted Turkish vaulted ceilings. Beyond the dining room is a bridge, overlooking the lower level, that leads to an open kitchen, terrace and master bedroom.

The kitchen has custom red cabinets and butcher-block countertops; appliances are stainless steel and made by the German company Siemens. A set of French windows off the kitchen lead to the small terrace, which also adjoins the master bedroom. The bedroom has a walk-in closet and a small half-bathroom. The apartment’s furniture is included in the asking price.

Stairs off the bridge, made of original stone found in another part of the building, descend to a lounge, living room and large walk-in closet that leads to a full bathroom. The living room has a small working fireplace carved into the stone walls, built-in bookshelves and a hammock. The bathroom has a restored cast-iron bathtub and shower. Its rustic stone walls are accented with Turkish-style tile that also adorns the countertops.

Just a few steps down the cobblestone street from the apartment’s entrance is the picturesque Crimea Memorial Church, built in the late 1800s. There are various parking lots nearby, but a car is not necessary as there is good access to public transportation, including the metro, buses and a tramway, Ms. Uriona said. Istanbul’s Old City is across the Golden Horn, a few minutes away by tram or 15 minutes on foot, she said.

Galata is an up-and-coming neighborhood known for its night life, as well as art galleries, cafes, restaurants and boutiques. The international airport is about 25 minutes away by car when there is no traffic, Ms. Uriona said.

MARKET OVERVIEW

The Turkish housing market has cooled down a bit from the torrid pace over the last decade, said N. Alp Sen, a senior manager of transaction advisory services and real estate with Ernst & Young. From 2012 to 2013, prices grew by almost 12 percent, according to a report from the real estate brokerage Knight Frank.

“The pace of growth has slowed down,” Mr. Sen said. “The construction side continues to grow, but the number of apartments sold has been decreasing for some consecutive months.”

Several factors, including new value-added tax laws and an anticipated economic cooling in 2014, he said, mean reduced sales volume for both new and resale homes through the end of this year. Home prices will most likely stabilize or fall, he added.

In general, however, sales of homes in Istanbul remain fairly brisk, particularly among foreign home buyers, who are often attracted to districts like Bahcesehir, Beylikduzu and Sariyer on the outskirts of the city, said Fatih Tuna, the director of the Istanbul office of Spot Blue International Property, an agency based in Britain specializing in Turkish real estate.

While homes that interest foreign buyers can start as low as about $120 per square foot, apartments in new projects typically cost $370 to $560 per square foot, and can run as high as $930 per square foot in luxury developments with Bosporus views, Ms. Uriona said. Apartments in renovated historic buildings, such as Alaattin Apartments, typically run about $370 to $560 per square foot, she said.

WHO BUYS IN ISTANBUL

Residents of countries around the Persian Gulf have been some of the biggest home buyers in recent years, said Julian Walker, the director of the London office of Spot Blue. While they tend to seek high-end homes in new developments in Istanbul and other large cities, buyers from European countries are typically looking for summer homes along the Aegean Sea in places like Bodrum, Fethiye and Izmir.

BUYING BASICS

Sales of Turkish homes are open to residents of about 183 countries, but there are some areas that are off limits to foreigners, typically rural areas or areas near military bases, brokers said.

Every foreign buyer must obtain written permission from the military; the process, considered a formality, can cost as little as $213 and can take 30 to 60 days, Ms. Uriona said.

Typically, closing costs paid by the buyer, which include the military approval fee, are about 5 percent of the sale price on average-priced homes, Mr. Walker said. Most foreigners buy in cash, because Turkish banks often require as much as 30 percent down at interest rates of at least 7.8 percent, Ms. Uriona said.